Barred from CXMT, Foreign Money Bets at a Discount

Until real trading began that morning, the offshore contract had no share price to track: its reference came from its own order book. Once the Shanghai Stock Exchange opened, the reference switched to the listed shares.

From that point, during Shanghai hours, the contract stayed below the shares at every hourly reading, closing as much as 6.0% under during the session. Perpetual futures use funding to keep the contract price close to the reference: when the contract trades below, longs receive and shorts pay, so that shorts have an incentive to close and longs to open until the gap narrows. On CXMT, short positions were paying up to about 3.0% every eight hours to hold on.

The gap was wide because there was no route between the two markets to arbitrage it away – no route for a trader to buy Shanghai and sell Hyperliquid until the two lined up. Foreign investors had almost no route into CXMT shares in Shanghai, and mainland investors had no lawful route to crypto derivatives. No other contract on Hyperliquid faced the same wall.

Twelve days, no shares

Trade.xyz, a decentralized trading platform, opened the market on 15 Jul through Hyperliquid's HIP-3 framework, which lets anyone deploy a perpetual futures market on any reference asset.

The contract carries no expiry: instead of settling on a delivery date, it stays open indefinitely and uses a funding rate to keep its price close to the underlying's. Ownership does not change hands either; the contract is a cash-settled bet on where CXMT's share price will go, which is why it can exist without any shares to back it.

On target, then adrift

As the Shanghai Stock Exchange prepared to open, the perpetual had been trading around $6.532, or 44.21 yuan at that morning's rate – 5.1 times the 8.66 yuan offer price, but 11% below where the shares themselves would open at 49.50 yuan.

The shares reached 55.03 yuan before easing, and closed at 49.00. Against the close, the perpetual's last print before the bell was 10% low.

That is a different result from the one found this month, when perpetuals on SK Hynix ran for six weeks before its Nasdaq listing. Those contracts had Seoul prices to follow. CXMT had none.

Blocked on both sides

A joint notice from the People's Bank of China and seven other agencies, issued in February 2026, bars mainland residents from trading virtual-currency-related financial products, including derivatives. It replaced a 2021 ban that had covered a narrower set of activities.

Prosecution is unusual. Instead, courts may treat the trades as void, meaning any losses fall on the trader and cannot be recovered. Authorities reserve the right to act where they see broader risk to the financial system.

Foreign investors face the opposite problem. Buying stock on China's onshore market requires either a licence to trade there directly or a route through Hong Kong, and CXMT has neither yet. Shut out of a 57.9bn yuan ($8.6bn) offering, the largest in mainland China since Agricultural Bank of China's in 2010, they had no way in – and the offshore contract has been trading in their absence. Who is trading it is not known.

Everything else stayed anchored

The gap was specific to CXMT. Every other equity-linked contract on Hyperliquid at the same moment sat within 0.2% of its reference: SK Hynix's Seoul-listed shares, SpaceX, Micron, Cerebras and SK Hynix's Nasdaq depositary receipts. Funding on those stayed within 0.1% in either direction every eight hours. CXMT was more than 30 times wider on both.

Four of those five underlyings were shut for the weekend at the time, their contracts holding to Friday's Nasdaq closes across two days of continuous perpetual trading. What holds them in place is not real-time arbitrage, but the arbitrage that opens with the next session. CXMT's underlying was open and trading, and the contract drifted anyway.

Closing from the other side

Three hours after the Shanghai close, the gap had almost disappeared. It stood at 0.6%, funding at 0.3% every eight hours.

The convergence was not really convergence. Once Shanghai closes, the reference no longer follows the shares. Instead, it is calculated from the contract's own trading, on a formula the venue makes public. Over those three hours, the reference fell about 8%, from $7.13 to $6.55, while the contract itself fell about 2%. In effect, the reference walked down to meet the contract because the shares were no longer there to hold it in place.

The two prices will diverge again when Shanghai does.

Perpetual futures data collected from Hyperliquid's public interface on 27 Jul. Share prices and the closing quote from TradingView. Yuan figures converted at 6.7679 to the dollar, the rate quoted on TradingView at the time of the snapshot; the venue's own oracle converts at the prevailing rate.